By David A. Longanecker
Executive Director, Western Interstate Commission for Higher Education

Although the federal government plays a secondary role in supporting and financing American higher education, this role remains quite substantial and clearly helps shape the enterprise. The federal government invests in higher education for two reasons. First, the federal government supports and directs two types of activities within higher education where it believes there is a primary federal responsibility: assuring access to postsecondary education and sustaining basic and applied research that is in the national interest. Second, the federal government provides support, generally more modest, in areas where there is a clear federal interest even though it is not primarily a federal responsibility. This federal involvement comes in three ways: funding, regulation of federally funded activities, and mandates to the states and institutions to pursue areas of federal interest.

Assuring broad student access through America's diverse higher education system is difficult for the federal government because each of the 50 states has a unique mix of tuition, institutional support, and state-supported financial aid working in conjunction with federal activities. Nonetheless, the federal effort has grown into a very substantial level of support over the last half-century, with the federal government today providing more than 75% of the total amount of student financial aid provided in America. Federal aid takes a variety of forms, including more than $50 billion in student loans, $10 billion in student grants, $7 billion in tax credits to students and their families, and $1 billion in work-study funds. Almost all of these funds are directed toward the students as consumers rather than to the institutions that provide the education.

To sustain basic and applied research, the federal government provides more than $15 billion annually to research universities throughout the country. This research support comes through many federal sources, most notably, though, through the National Science Foundation, the Institute of Medicine, the Department of Energy, and the Department of Defense. This investment in our nation's research infrastructure has secured America's preeminence internationally in the creation and transmission of new knowledge.

The Fund for the Improvement of Postsecondary Education (FIPSE) represents an example of the second type of federal support-in areas in which the federal government has a strong interest but not primary responsibility. Through FIPSE, a modest level of federal funding encourages innovation in higher education because improving higher education is believed to be in the federal interest. Likewise, federal support for institutions that serve minority populations helps ensure the continued presence of institutions that have an important role in higher education and might have difficulty surviving without such financial support. Often, the federal government addresses these "federal interest" areas through regulation or mandates, rather than through direct funding. For example, institutions of higher education must regularly collect and disseminate information on graduation rates, support of intercollegiate athletics and athletes, campus crime, and other areas that are deemed to be of public interest.

Blending these federal efforts with those of the 50 states, however, is a substantial challenge, and neither the states nor the federal government does a good job of addressing it. While the states are generally aware of the importance of federal programs, seldom are state policies designed to complement federal efforts. And the federal government is even less intentional in its policy efforts, seldom taking into account the ways in which changes in federal policy affect the states, either positively or negatively. Despite these difficulties, the net result is a hybrid system that is without doubt one of the most diverse, most accessible, and best systems of higher education in the world.